08-02-2017 - Government Tort Claim Denials - Item No. 1.pdfAGENDA
ITEM NO. -----'-'1-
AGENDA STAFF REPORT
DATE:
TO:
FROM:
City of West Covina I Office of the City Manager
August 2, 2017
Mayor and City Council
Chris Freeland
City Manager
SUBJECT: GOVERNMENT TORT CLAIM DENIALS
RECOMMENDATION:
It is recommended that the City Council reject and deny the following Government Tort Claim
and the claimant and/or the respective attorney be notified.
• West Covina Police Officers Association vs. City of West Covina
DISCUSSION:
City Attorney has investigated the above referenced claim and has determined that all or most of
the claim is untimely; to the extent any part of the claim is timely or is deemed timely, staff does
not believe there is any liability on the City's part.
Specifically, this claim, dated June 30, 2017, relates to payments the City allegedly made on or
before January 5, 2015. As a result, any claim relating to those alleged payments should have been
made on or before July 5, 2015. As no such claim was filed, the claim in its entirety should be
rejected as untimely; to the extent that any part of the claim could have been deemed timely if it
was filed between July 5, 2015, and January 4, 2016, it is too late for an application for late claim
to be filed. Although it appears that the entire claim should be rejected as filed too late, the
claimant should be advised that if any part of the claim which could be deemed timely if an
application for late claim was filed and granted, should be the subject of an application for late
claim. As to any part of the claim which could be deemed timely, the claim should be denied on
the merits.
Since all claims should be considered potential lawsuits, it is requested that all Council Members
refrain from making specific public comments so as not to prejudice any claim. Specific questions
should be referred to the City Attorney.
FISCAL IMP ACT:
The potential fiscal impact is undetermined at this time. The current, ongoing process is expected
to incur legal and administrative fees.
Prepared by:
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Management Analyst
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AGENDA
ITEM NO. 2 ---
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: August 2, 2017
TO:
FROM:
Mayor and City Council
Chris Freeland
City Manager
SUBJECT: PORTO'S BAKERY & CAFE LEASE AGREEMENT
RECOMMENDATION:
It is recommended that the City Council take the following action:
1. Find that the approval of the attached lease is exempt from California Environmental
Quality Act ("CEQA") review pursuant to CEQA Guideline Sections 15061(b)(3) and
15301; and
2. Approve the attached Lease Agreement and authorize the City Manager to execute the
Lease Agreement between the City of West Covina and Porto' s Bakery & Cafe for use of
the City's Parking Facilities at the Civic Center.
BACKGROUND:
Porto's Bakery and Cafe (Porto's) is a family owned Cuban bakery that was started in 1960, by
the Po1to Family. Porto's has grown to four locations starting from their Glendale bakery, to
Burbank, Downey, and Buena Park.
After two years of the City's economic development staff pursuing Porto's to locate in West
Covina, in April of 2015, Porto's purchased the former Crazy Horse property located at 1360 E.
Garvey Avenue South. In March 2015, Porto's initiated the entitlement process for the West
Covina location by submitting plans to the Planning Department for a Precise Plan of its new
building. However, Porto' s had to focus its attention on completing its Buena Park location. As
its Buena Park location has since opened, Pmto's is currently proceeding with the West Covina
bakery location.
Porto' s Lease Agreement
Page 2 of 4 -August 2, 2017
Po1to' s architect has submitted the corrections for its Precise Plan of the new building, and have
concurrently submitted its constrnction drawings to the Building Department for the building
permit.
P01to's initial plans was to rehabilitate the former Crazy Horse restaurant building. However, due
to the amount of attention it received for the West Covina location, Porto's has decided to demolish
the building and construct a new building. In addition, Porto's Burbank location finished first on
Yelp's Top 100 list as the number one place to eat in the United States for 2016.
DISCUSSION:
While Porto's is still in the process of obtaining their Planning entitlement, based on the submitted
plans, Porto's is expected to meet the City's parking requirements for the new development.
However, due to the response it has received for the West Covina location and the anticipated
volume expected, Porto's would like to ensure it can address parking demands for the bakery and
cafe. To help alleviate the parking demand and provide the most customer friendly experience,
Porto's is seeking alternative parking locations for employees.
The City has previously considered leasing parking spaces to Crazy Horse Restaurant &
Steakhouse. While the lease was never executed, it was something the City at that time was
amenable to consider.
As such, Porto's is requesting the use of the City's Parking Facilities (Attachment No. 1) for
employee parking. Porto's would like to use the top deck of the parking structure (Area A) and
the parking lot (Area B) in front of City Hall. The parking spaces would be strictly used for Porto' s
employee parking during hours City Hall is closed. The City Attorney has drafted a Lease
Agreement (Attachment No. 2), with terms of the agreement that include the following:
• Porto's could lease approximately 519 parking spaces (those not leased by the County
of Los Angeles)
• Porto's could lease the parking spaces only during hours/days City Hall is closed.
• The leased parking spaces would be strictly for Porto' s employee parking.
• Term of the agreement would be for one (I) year, commencing when Porto' s West
Covina Bakery and Cafe becomes operational.
• Porto' s would indemnify the City, name the City on its insurance and provide proof of
msurance coverage.
• Porto' s would be responsible for all signage required for the leased parking spaces, and
pay for any damage/improvements associated with the installation/removal of the
signage.
While the City currently has a lease with the County of Los Angeles for a portion (436 spaces) of
the parking spaces within the Parking Facilities, including 100 parking spaces by the County
Library, the City retains the right to assign/charge fees for the remaining parking spaces as the City
desires. In addition, as the lease would allow use of the parking spaces during hours City Hall is
closed (for example, after 5:30 p.m. to 7:30 a.m.), it would not impact the use of the Parking
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Po1to's Lease Agreement
Page 3 of 4 -August 2, 2017
Facilities by Civic Center patrons. The te1m of the agreement is for one (I) year, and as such the
City can address any concerns during a renewal/new agreement process.
The lease agreement addresses the potential for future valet parking services should P01to's desire
to provide that amenity to its guest. If Porto's pursues valet parking, the City and Porto's would
need to enter into a shared revenue agreement for use of the City parking facilities for valet parking.
LEGAL REVIEW:
The City Attorney's Office assisted in the drafting of the lease agreement and approved it as to
form.
OPTION(S):
The City Council has the following options:
I) Approve staffs recommendation;
2) Have staff modify the Lease Agreement; or
3) Provide alternative direction.
ENVIRONMENTAL REVIEW:
On July 25, 2017 the Planning Commission adopted a Resolution, finding the proposed P01to's
lease is exempt from California Environmental Quality Act (CEQA) pursuant to one statutory and
two categorical exemptions as follows:
I. State CEQA Guidelines Sections 15061(b)(3) and 15378 exempt projects that have no
potential for causing a significant effect on the environment. Where it can be seen with
certainty that there is no possibility that the activity in question may have a significant
effect on the environment, the activity is not subject to CEQA.
In addition, the project is categorically exempt under Section 15301 (Existing Facilities) as the
proposal consists of a lease for the part-time use of existing parking space available in the Civic
Center. Attached is the Planning Commission Staff Report and resolution (Attachment No. 3).
FISCAL IMPACT:
There is no fiscal impact to the City by entering into a lease agreement for the parking. However,
there will be a positive fiscal impact generated from sales tax with the opening of Porto's Bakery
&Cafe.
Porto' s Lease Agreement
Page 4 of4-August2, 2017
Prepared by: ee~---""~-Gerardo R~ ___)
Project Co;ilinmor.
Additional Approvals:
(Approved via Email)
Kimberly Hall Barlow
City Attorney
ATTACYVIENTS:
Attachment No. 1-Aerial of Parking Facilities
Attachment No. 2 -Draft Lease Agreement
Attachment No. 3 -Planning Commission Report and Resolution
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Porto's Lease Agreement:
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Attachment No. 2
LEASE AGREEMENT
THIS LEASE AGREEMENT ("LEASE") is made and entered into this __ _
----' by and between the CITY OF WEST COVINA ("CITY") hereinafterrefen-ed
to as the LESSOR, and PORTO'S BAKERY & CAFE ("PORTO'S") hereinafterrefen-ed
to as the LESSEE.
WITNESSETH:
WHEREAS, LESSOR is the owner of the City Hall Parking Facilities, located at 1444 West Garvey
Avenue.
WHEREAS, LESSEE desires to lease Parking Spaces within the City Hall Parking Facilities,
specifically spaces located at the top level of the Parking Structure (Area A) and spaces within the Parking Lot
(Area B), hereinafter refen-ed to as LEASED AREA, as per plan attached thereto as Exhibit A.
WHEREAS, on January 4, 1972 the City of West Covina and the County of Los Angeles (County)
entered into the Lease and Agreement No. 19104, as amended, for use of City's parking lot and structure. The
County leases 436 spaces within the Civic Center, including 230 within the Structure of which 109 are on the top
level and 106 in the Parking Lot Area B.
WHEREAS, pursuant to the Lease and Agreement No. 19104, as amended, with the County, the City
reserves the right to charges fess for all other spaces not leased by the County.
WHEREAS, the leasing of Parking Spaces is reasonable for the use of the LESSEE, is being offered by
LESSOR as a development incentive and it is for the best interests of the parties hereto that this LEASE be
entered into.
NOW, THEREFORE, In consideration of the foregoing recitals, which are an integral part of this
LEASE, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the LESSOR and LESSEE agree as follows:
1) LEASED AREA: LESSOR hereby leases 519 Parking Spaces in said LEASED AREA to LESSEE,
as per plans attached as EXHIBIT A. The LEASED AREA excludes the spaces cmTently leased by the County of
Los Angeles (Area A 109 and Area B 106) LESSOR will lease to LESSEE the LEASED AREA during the hours
City Hall is closed including Holidays for employee parking free of charge.
2) TERM: The term of this LEASE shall be for one year, commencing at a time mutual agreed to by
both parties, but not sooner than LESSEE' s West Covina location is operational. The commencement date will
be determined in a letter of agreement executed by both patties. The LEASE may be cancelled by either patty,
with or without cause, with thirty (30) days advance written notice to the other party.
3) RENT: As a development incentive, there will be no rental charge for the rental of the parking
spaces during the aforementioned initial term of the LEASE.
4) USE:
a) The use of the LEASED AREA shall be for the exclusive use of LESSEE'S employees for
parking purposes only. This notwithstanding, only employees of the LESSEE shall be authorized
Lease Agreement
Porto's Bakery & Cafe
West Covina City Hall Parking Structure
to park or remove vehicles from the LEASED AREA.
b) If at a future time, LESSEE's desires to provide valet parking to customer's, at that time
LESSEE may request approval by the City to utilize the LEASED AREA for valet parking. The
LEASEE will be charged a fee for the LEASED AREA utilized for valet parking, to be agreed
upon by both parties at the time of the request by a new lease agreement or an amendment to the
LEASE.
c) The LESSEE is responsible for marking, reserving, issuing parking permits and/or otherwise
posting any necessary restrictions on LESSEE's leased spaces in the LEASED AREA.
5) RESERVATION: The LESSOR reserves the right to use the LEASED AREA from time to time for
City of West Covina authorized special events. The LESSOR shall give LESSEE advance notice of said use.
6) ASSIGNMENT AND SUBLETTING: The LESSEE shall not assign the LEASE or any interest
therein or sublet the LEASED AREA or any portion thereof without in each instance first obtaining the written
consent of the LESSOR, which consent shall be at the sole discretion of LESSOR.
7) MAINTENANCE: The LESSEE shall be responsible to maintain the LEASED AREA so that is
clean and free of debris daily. The LESSOR reserves the right to charge LESSEE when it must clean any debris
from the Parking Spaces in the LEASED AREA as a result of LESSEE's use of the LEASED AREA. In
addition, LESSOR reserves the right to terminate LEASE as a result ofLESSORnot maintaining the LEASED
AREA in a clean and orderly manner.
8) WASTE: The LESSEE shall not commit, or suffer to be committed, any waste upon said LEASED
AREA.
9) INDEMNITY AND HOLD HARMLESS: The LESSEE hereby agrees to defend, hold the LESSOR
harmless and indemnify it against all liability, loss, cost or obligation on account of or arising out of any injuries
to any person, persons, or property, including the LESSEE, its agents or customers, from any cause or causes
whatsoever while in, upon, or in any way connected with the LEASED AREA during the term of the LEASE or
any extension thereof.
10) INSURANCE: LESSEE will procure and maintain throughout the duration of this LEASE,
insurance against claims for injuries to persons or damages to property which may arise from or in connection
with the LESSEE's occupation and use of the LEASED AREA. LESSEE will provide cun-ent evidence of the
required insurance in a form acceptable to the LESSOR and will provide replacement evidence for any required
insurance which expires prior to the completion, expiration or termination of this LEASE.
Nothing in this section will be construed as limiting in any way, the Indemnification and Hold Harmless clause
contained herein in Section "9" of this LEASE, or the extent to which LESSEE may be held responsible for
payments of damages to persons or property.
Notwithstanding the following, during the Term of this LEASE, LESSOR reserves the right to make
modifications or amendments to the types of insurance or levels of coverage that are required to be obtained and
maintained by LESSEE under this LEASE.
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Lease Agreement
Porto's Bakery & Cafe
West Covina City Hall Parking Structure
a) Minimum Scope and Limits oflnsurance. LESSEE will be required to maintain the following levels
of insurance coverage:
1. Liability Insurance. LESSEE will maintain commercial general liability insurance with a minimum
limit of$1,000,000 per occurrence, and $2,000,000 in the aggregate. Such insurance will include
coverage for products and completed operations, contractual liability and personal injury.
2. Workers' Compensation and Employers' Liability Insurance. LESSEE will maintain workers'
compensation insurance as required by the State of California and employers' liability insurance with
limits of not less than $1,000,000 each accident.
b) Deductibles
Any deductible applicable to those coverages set forth above must be approved in advance by LESSOR.
c) Endorsements
The required insurance policies will contain or be endorsed to contain the
following provisions:
1. General Liability
The City of West Covina (LESSOR), its elected or appointed officials, officers, employees,
agents and volunteers are to be covered as insureds with respect to liability arising out of
LESSEE's occupancy, maintenance or use of the LEASED AREA; or with respect to liability
arising out of automobiles owned, leased, hired or borrowed by or on behalf of the LESSEE. The
coverage contains no special limitations on the scope of its protection afforded to the LESSOR,
its officials, officers, employees, agents and volunteers.
This insurance is primary insurance as respects LESSOR, its officers, employees, agents and
volunteers, to at least the per occurrence limits required herein, and applies separately to each
insured against whom a suit is brought or a claim is made. Any insurance or self-insurance
maintained by LESSOR, its officers, employees, agents and volunteers will be excess of this
insurance and will not contribute with it.
2. Workers' Compensation and Employers' Liability Insurance and All Risk Property Insurance.
Insurer will waive their right of subrogation against LESSOR, its officers, employees and
volunteers.
3. All Coverages.
Each insurance policy required by this clause will be endorsed to state that coverage will not be
canceled, or substantially reduced in coverage or limits, except after thirty (30) days' notice has
been given to LESSOR (ten (10) days' for non-payment of premium).
d) Acceptability of Insurers
All required insurance will be placed with insurers acceptable to LESSOR with current BEST'S
ratings ofno less than A-; Class X. Workers' compensation insurance may be placed with the
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Lease Agreement
Porto's Bakery & Cafe
West Covina City Hall Parking Structure
California State Compensation Insurance Fund. All insurers will be licensed by or hold admitted
status in the State of California.
11) REMEDIES: All rights and remedies of the LESSOR contained in this LEASE shall be construed
and held to be cumulative and not exclusive, and LESSOR shall have the right to pursue any one or all of such
remedies, or any other remedy which may be provided by law, whether or not stated in this LEASE. A waiver
by LESSOR of any breach of any of the covenants of this LEASE by LESSEE shall not constitute a waiver of
any succeeding or preceding breach of the same or any other covenant or condition herein contained.
12) TERMINATION: In addition to the right of termination provided in Section 2 herein, should the
LESSEE default in the payment of any sum due as herein provided, or default in the performance of, or breach
of any other covenant, condition or restriction of this LEASE herein provided to be kept or performed by
LESSEE, and should such default or breach continue uncured for a period of thirty days from and after written
notice thereof by LESSOR to LESSEE by certified mail, and in any such event, LESSOR may at its option
terminate this LEASE by giving LESSEE written notice thereof, and thereupon this LEASE shall cease and
terminate, and LESSEE'S rights in and to the LEASED AREA and improvements erected and placed thereon
shall cease and end, and the LESSOR may without further notice or demand or legal process, re-enter and take
possession of said LEASED AREA and all improvements thereon and oust the LESSEE, and all persons
claiming under the LESSEE therefrom, and except as herein otherwise provided LESSEE and all such persons
shall quit and surrender possession of said LEASED AREA and all improvements thereon to LESSOR;
provided, however, that such termination shall not relieve the LESSEE from the payment of any sums then due
and payable from LESSEE, or any claims for damages then accrued against LESSEE hereunder, and such
termination shall not prevent LESSOR from recovering any such sums or damages, or from enforcing such
obligations or recovering damages from any default thereof by any remedy provided by law.
13) SURRENDER OF POSSESSION: At the expiration of said term, or any sooner termination of this
LEASE, the LESSEE hereby agrees to quit and surrender possession of the LEASED AREA to LESSOR in as
good condition as reasonable use and wear will permit, damage by the elements or other casualty excepted. All
signs and markings shall be removed at LESSEE'S expense.
14) BINDING ON ASSIGNS: The terms, covenants and conditions herein contained shall bind and
inure to the benefit of the parties hereto, their successors and assigns.
IN WITNESS WHEREOF the paiiies hereto have executed this LEASE on the day and year first above
written.
CITY OF WEST COVINA (LESSOR):
By:------------
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Lease Agreement
Po1to 's Bakery & Cafe
West Covina City Hall Parking Structure
PORTO'S BAKERY & CAFE (LESSEE):
By: ___________ _
Owner/ Authorized Representative
Porto's Bakery & Cafe
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City of West Covina
Attachment No. 3 Memorandum
AGENDA
ITEM N0 .. __ _,3"-----
TO: Planning Commission DATE: July 25, 2017
FROM: Planning Department
SUBJECT: LEASE OF CITY HALL PARKING FACILITIES TO PORTO'S BAKERY
AND CAFE GENERAL PLAN AND CEQA DETERMINATION
The City of West Covina is currently processing Precise Plan No. 16-02 to allow for a new
building and site layout to allow a Porto' s Bakery and Cafe (Porto' s) at 1360 W. Garvey Avenue
South. The subject property was fo1merly the Crazy Horse Restaurant and is located directly
across Sunset A venue from the Civic Center parking structure.
The City is working with Porto' s to lease a portion of the Civic Center parking structure for
employee parking needs. While Porto's is proposing 138 parking spaces on their property, and
the provided parking fulfills the requirements of the Municipal Code, allowing for employee
parking in the Civic Center will increase the available number of parking spaces on the their lot.
The lease will address the following issues.
• The lease of parking spaces from the City in the Civic Center
• The use of parking spaces only during hours and/or days City Hall is closed
• Leased parking spaces would be for Porto' s employee parking only
• One-year lease, with options for continuing after one year
• Indemnification of the City
The parking lease is being prepared and is scheduled for review by the City Council on August
15,2017.
ANALYSIS:
The subject property has a General Plan Land Use Designation of Civic: Public and Institutional.
The proposal does not entail the construction of new facilities, but rather would allow the Porto' s
employees to utilize the existing Civic Center parking facilities. The General Plan does not
specifically reference the Civic Center except through the Land Use Designation. The "Civic:
Public and Institutional" Land Use Designation indicates that the General Plan assumes the
continuing use of the Civic Center for City and County governmental uses. No changes would
be made to the parking facilities and the parking spaces would continue to be available for public
parking purposes. The proposal is in conformance with the following policies of the General
Plan:
Porto's Parking Lease -Conformance to General Plan
July 25, 2017
Our Prosperous Community
Policy 2.la
Policy 2.7
Improve connections to the Mall from Surrounding Areas. In order for the
mall visitors to support other complementary retail and dining in the
Downtown area and vice versa, creating strong connections to both the
Glendora Avenue Corridor and the Civic Center from the Mall location
can help create a more integrated downtown district.
Target employment based uses to downtown.
Our Well Planned Community
Policy 3.4 Direct new growth to downtown area and the corridors. Adapt economically
underused and blighted buildings, consistent with the character of
surrounding districts and neighborhoods, to support new uses that can be
more successful. Provide opportunities for healthy living, commerce,
employment, recreation, education, culture, ente1tainment, civic
engagement, and socializing.
ENVIRONMENTAL ANALYSIS:
The California Environmental Quality Act (CEQA, Section 21000, et seq. of the California
Public Resources Code), requires that the potential impacts of projects that will have a physical
impact on the environment be analyzed prior to their construction. State CEQA Guidelines
Sections 15061(b)(3) and 15378 exempt projects that have no potential for causing a significant
effect on the environment. Where it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment, the activity is not subject to
CEQA.
In addition, the project is categorically exempt under Section 15301 (Existing Facilities) as the
proposal consists of a lease for the part-time use of existing parking space available in the Civic
Center.
The project is also categorically exempt under Section 15327 (Leasing New Facilities) as the
proposal consists of a lease of City-owned parking facilities in the Civic Center.
Therefore, the lease will not have a direct effect on the environment. As such, the potential
action qualifies for this exemption and no further environmental review is required.
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I.
Porto~s Parking Lease -Conformance to General Plan
July 25, 2017
CONCLUSION:
The attached resolution allows the Planning Commission to make a determination that the project
conforms with the General Plan and that the project is exempt from the California Environmental
Quality Act (CEQA).
RECOMMENDATION:
Staff recommends that the Planning Commission find that the proposed parking lease is exempt
from CEQA review and that the proposed Porto's lease of parking spaces at the Civic Center is
in conformance with the General Plan.
Jeff Anderson
Planning Director, AICP
Attachment No. I -Resolution of General Plan Confmmity
PLANNING COMMISSION
RESOLUTION
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF
WEST COVINA, CALIFORNIA, FINDING THE LEASE OF PARKING
SPACES AT THE CIVIC CENTER BY PORTO'S BAKERY AND CAFE IN
CONFORMANCE WITH THE GENERAL PLAN
WHEREAS, the City has parking facilities at the Civic Center at 1444 W. Garvey A venue
South that are utilized during City Hall operating hours; and
WHEREAS, the City intends to enter into a lease of parking spaces at the Civic Center
for use by employees of Porto's Bakery and Cafe during hours and days that the City Hall is not
in operation; and
WHEREAS, the use of the existing parking facilities by Porto' s Bakery and Cafe will not
change the character of the parking facility use; and
WHEREAS, the Planning Commission of the City of West Covina is the planning agency
for the City; and
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred; and
WHEREAS, the Planning Commission on 25th of July 2017, reviewed the report and
determined that the leasing of the parking spaces at the Civic Center was consistent with the
General Plan.
NOW, THEREFORE, the Planning Commission of the City of West Covina does resolve as
follows:
1. The determination of the General Plan consistency for parking lease is consistent with the
Genera Plan based on the following citations:
Our Prosperous Community
Policy 2.1 a Improve connections to the Mall from Surrounding Areas. In
order for the mall visitors to support other complementary
retail and dining in the Downtown area and vice versa,
creating strong connections to both the Glendora Avenue
Corridor and the Civic Center from the Mall location can
help create a more integrated downtown district.
Policy 2.7 Target employment based uses to downtown.
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Planning Conunission Resolution
Confonnance to General Plan
July 25, 2017 -Page 2
Our Well Planned Community
Policy 3 .4 Direct new growth to downtown area and the corridors.
Adapt economically underused and blighted buildings,
consistent with the character of sun-ounding districts and
neighborhoods, to support new uses that can be more
successful. Provide opportunities for healthy living,
commerce, employment, recreation, education, culture,
entertainment, civic engagement, and socializing.
2. This Resolution shall constitute this Commission's report and recommendation to the
City Council as required by the Government Code.
3. The Planning Commission also finds and determines that the project does not qualify as a
project or is categorically exempt from the requirements of the California Environmental
Quality Act of 1970, as amended, and the guidelines promulgated thereunder pursuant to
Section 1506l(b)(3) and 15378 of the CEQA Guidelines, in that the proposed action
consists of a lease of existing parking facilities, which does not have the potential for
causing a significant effect on the environment, and that it also qualifies as a categorical
exemption pursuant to Section 15301 (as the proposal is the use of an existing structure)
and Section 15327 (as the proposal is the lease of an existing City-owned property) of
Division 6 of Title 14 of the California Code ofRegulations.
4. The Secretary of this Commission shall certify to the adoption of this Resolution and
forthwith transmit a certified copy to the City Council, as the report required to meet
California Government Conde 65401.
Platming Commission Resolution
Conformance to General Plan
July 25, 2017 -Page 3
I HEREBY CERTIFY, that the foregoing Resolution was adopted by the Planning
Commission of the City of West Covina, at a regular meeting held on the 25th day of July, 2017
by the following vote.
AYES:
NOES:
ABSTAIN:
ABSENT:
DATE: July 25, 2017
Don Holtz, Chairman
Planning Commission
Jeff Anderson, Secretary
Planning Commission
AGENDA
ITEMNO. 3
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: August 2, 20 17
TO: Mayor and City Council
FROM: Cluis Freeland
City Manager
SUBJECT: BANK FEE ANALYSIS
RECOMMENDATION:
It is recommend ed that the City Council continue with Wells Fargo as our hank based on reduced
negotiated fees and continue to review the fees with the bank representative on an arumal basis.
BACKGROUND:
At the June 22, 2017, Special Budget City Counci l Meeting, the City Council had a discussion on
the banking/credit card fee line item of $76,250, within the Finance Department. The City Council
directed staff to review the bank fees and determine if these could possibl y be reduced either
through discussion with Wells Fargo, or through a Request For Proposal (RFP) process.
DISCUSSION:
Staff reviewed the breakdown of costs for the banking/credit card fees and noted the following:
1) The costs in the amount of $49,200 is directly related to estimated credit card fees, which
was discussed during the Master Fee Schedule process. These costs are estimated to be
recovered from the new service charge on credit card usage. The Fiscal Year (FY) 2017-
18 adopted budget represents the estimated revenue from service charges of $50,000.
2) The costs in the amount of $2,050 is the Custody Account Admin Fee for bond cash with
fi scal agents. This is a set contract fee through the bonding processes.
3) The remaining $25,000 relates to the general banking service fees for the City.
Bank Fee Analysis
Page 2 of2 -August 2, 2017
Banking service fees are broken down by transaction type and transaction use . Staff requested a
breakdown of the banking service fees and the cost per service. The service costs included ACH
usage, Fraud filter, Account Reconcilement, Branch use, General Account Service, Image
Delivery, Information Reporting, Positive Pay, Returned Items, and Wire Transfers. These costs
were broken down by transaction cost an.d the City's monthly average usage of each transaction
type.
On average, the monthly banking service fee is approximately $2,080 per month. After discussions
with the Wells Fargo banking representative on how to effi ciently utilize the City's transaction
usage for each line item, the various transaction type fees were negotiated down to a lower rate.
The new negotiated fees are estimated to be $1,460 per month. This would equate to a savings of
approximately 30% for FY 2017-18.
OPTIONS:
The City Council has the following options:
1) Adopt staff's recommendation; or
2) Direct staff to issue an RFP for bankin g services.
FISCAL IMP ACT:
The cwTent negotiated reduced banking service fees are estimated to provide $7,500 in savings for
Fiscal Year2017-18.
Prepared by: Reviewed and Approved by:
~rhlJJ.rA NicoleLu~ ~t:~ 1DL
Accounting Manager Financial Consultant
AGENDA
ITEMNO. 4
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: August 2, 201 7
TO:
FROM:
Mayor and City Council
Chris Freeland
City Manager
SUBJECT: AUTO PLAZA BUSINESS IMPROVEMENT DISTRICT REVISED SIGN
REPLACEMENT AGREEMENT
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute the revised Auto
Plaza Sign Loan Agreement with the West Covina Auto Plaza Association, Inc.
DISCUSSION:
On March 1, 2016, the City Council authorized the City Manager to execute a Sign Replacement
Agreement (Agreement) with the West Covina Auto Plaza Association (Auto Plaza) for the new
Auto Plaza reader board sign. The City Council approved a loan in an amount of $532,582, which
is to be repaid over IO years at 2% interest. The Auto Plaza makes payments of $29,313.20, on
the loans, on January 1 and July 1 of each year. The first two payments of the loan were made, so
the outstanding loan amount is $483,965.37.
The installation of the sign took more time than originally scheduled and there were some
discrepancies between the Auto Plaza and the installer on the costs associated with pulling of
permits on the sign. The Auto Plaza recently adopted their Fiscal Year 2017-2018 Business
Improvement District budget, which provided the additional funding to pay for those permits. No
permit fees were waived by the City.
City staff is seeking approval to execute the attached revised Sign Replacement Agreement
(Attachment No. 1) that clarifies a discrepancy in the original Agreement, which stated the loan
was for $523,582 and not the approved $532,582 from the March 1, 2016, City Council Meeting.
Auto Plaza Business Improvement District Revised Sign Replacement Agreement
Page 2 of 2 -August 2, 201 7
OPTIONS:
The City Council has the following options:
1) Adopt staffs recommendation; or
2) Provide alternative direction.
FISCAL IMPACT:
There is no fi scal impact to the City, as this Agreement was approved by the City Counci l on
March 1, 2016.
Prepared by:
OQ':[(?
Chris Freeland
City Manager
ATTACHMENT:
Attachment No. 1 -Closed Session Staff Report of February 21 , 2017
LED SIGN REPLACEMENT LOAN AGREEMENT
by and between
THE CITY OF WEST COVINA,
And
WEST COVINA AUTO PLAZA ASSOCIATION, INC
ATTACHMENT NO. 1
LED SIGN REPLACEMENT LOAN AGREEMENT
THIS LED SIGN REPLACEMENT LOAN AGREEMENT ("Agreement") is entered into as of June
__ , 2016 ("Effective Date") by and between the CITY OF WEST COVINA, a municipal corporation
("City") and WEST COVINA AUTO PLAZA ASSOCIATION , INC. a California non-profit corporation (the
"Association").
RECITALS
A. On June 1, 1993 the City established the West Covina Auto Plaza Business Improvement
District ("BID"); and
B. Assessment revenue is collected from the businesses within the BID and is used to pay
for capital costs, operation, and maintenance of a readerboard sign within the BID as well as monument
signs and landscaping; and
C. On April 1, 1994, the City appointed the Association, whose members consist of the
owners of the auto dealerships located within the BID, as an advisory board to review the annual financial
report of the BID and make recommendations regarding a budget to the City Council of the City; and
D. On February 8, 2016, the Association approved the Annual Report and budget for Fiscal
Year 2016-2017 including a request to the City for a loan in the amount of $532,582.00 ("Loan") to
replace the existing electronic readerboard sign with a full color LED sign ("Project'); and
E. On February 23, 2016, the Association executed an agreement with Electra Media, Inc
("EMI") to replace the readerboard sign, contingent upon City funding; and
F. The City has determined that the granting of a Loan to the Association to fund the
replacement of the readerboard sign is in the vital and best interest of the City and the welfare of its
residents.
NOW, THEREFORE, the parties hereto agree as follows:
TERMS
1. Incorporation of Recitals. The Recitals set forth above are found by the City and Association to be
true and correct, and each of them is incorporated into the Agreement by this reference.
2. Term. This Agreement shall commence on the Effective Date of this Agreement, and shall continue
for a period of 10 years, or until such time as the Loan has been fully repaid to City, or until such time as
this Agreement shall be terminated, whichever occurs soonest ("Termination Date").
3. City Loan. In exchange for the Association's covenants and commitments set forth in this Agreement,
the City agrees to Loan to the Association, and the Association hereby agrees to borrow from the City, an
amount not to exceed Five Hundred Thirty Two Thousand Five Hundred Eighty Two Dollars
($532,582.00) (the "Loan"). The Loan shall be distributed and repaid in accordance with the terms and
conditions in this Agreement, and subject further to the terms and conditions set forth within the
Promissory Note attached hereto as Exhibit A ("Note").
a. Timing of Disbursement. The City shall disburse the Loan to Association in one payment within
1
30-days following the Effective Date but in no event later than June 30, 2016.
b. Interest. The City Loan shall start to accrue interest at the rate of two percent (2%) simple
interest per annum from the .date of disbursement. The City Loan shall be evidenced by the
Promissory Note, and secured as set forth below. Notwithstanding the foregoing, the City retains
the right to accelerate the full Note amount or right to foreclose upon the Loan, as authorized in
the terms of the Note and subject to any applicable notice and cure period set forth in this
Agreement.
c. Repayment of Loan.
1l Within thirty days of the Effective Date, the parties shall establish a loan repayment
schedule ("Repayment Schedule") based upon the Association repaying the entire Loan,
and accrued interest, in equal monthly payments over a ten year period (each biannual
payment being hereinafter referred to as an "Association Payment").
a. The first Association Payment shall be paid to City on December 31, 2016. The
next Association Payment shall be paid within six months but no later than June
30th, and such payments shall continue each January 1 and June 30 thereafter
until the entire Loan is repaid in full to City. The parties may mutually agree in
writing to an earlier repayment schedule, in the City Manager's discretion, but
the Repayment Schedule may not be extended beyond the ten year repayment
term without formal written consent of the City Council. Notwithstanding the
foregoing, the Association u.nderstands and agrees that at the City's sole
discretion, the City may offset any payments due but unpaid or due to be paid to
City in the succeeding fiscal year against any BID assessment proceeds which
the City would have deposited to the account of the Association.
b. To secure repayment of the Loan, prior to and as a condition precedent to the
City's disbursement of the Loan, the Association will execute the attached Note
and such other documents as City reasonably requires to secure its interest in
the Project. The executed Note will be delivered to City upon the City's
disbursement of the Loan.
·c. Association's failure to execute the Note or other required documents shall
constitute a material breach of this Agreement and City shall have no obligation
to disburse any amounts unless such breach shall be cured. No breach shall be
declared under this section until Association has been given thirty days' written
notice of the breach, and has failed to cure the breach within that period.
d. If there is any default in the payments required in subsection 1)a. hereof,
Association shall have ten (10) days after the due date of the payment to cure
such default before City may accelerate the remaining balance of the Loan.
21 Notwithstanding anything stated herein to the contrary, the entire outstanding balance of
the Loan, including any principal, interest and other charges, shall be immediately due
and payable to City on the expiration of the ten (10) year term hereof or upon the
termination of this Agreement for any reason, whichever occurs soonest ("Loan
Termination Date"). Nothing in this Agreement shall limit the full Note amount from
being accelerated or foreclosed upon as authorized in this Agreement.
1
.fil Notwithstanding the foregoing, Association may pay to City the balance of the Loan, or
any portion thereof, .at any time prior to the Termination Date without incurring any
prepayment penalties.
4. Additional Security. For the purpose of securing payment of the indebtedness in the principal
amount of up to $532,582.00 according to the terms of this Agreement and the Note, and any renewal,
extension, or modification of the Note and/or Agreement and the performance of each agreement
contained in this Agreement, the Association covenants that it shall:
1) Maintenance and Repair
Keep the Project and Project Site in good condition and repair; not to remove or demolish
the Project; to complete or restore promptly and in good and workmanlike manner any
building that may be constructed, damaged, or destroyed associated with the Project; to pay
when due all claims for labor performed and materials furnished for the Project, provided
however, that the Association shall not be required to pay any claims for labor or materials
that it contests in good faith, until the final resolution of such contested claims ; to comply
with all laws affecting the Project or requiring any alterations or improvements to be made on
the Project Site; not to commit or permit waste of the Project; not to commit, suffer, or permit
any act on the Project Site in violation of law; and to cultivate, irrigate, fertilize, fumigate,
prune, and do all other acts that from the character or use of the Project Site may be
reasonably necessary.
2) Fire Insurance
Provide, maintain, and deliver to City fire insurance satisfactory to and with loss payable to
City. The amount collected under any fire or other insurance polfcy shall be applied to the
repair or restoration of the Project. This application shall not cure or waive any default or
notice of default under this Agreement or invalidate any act done pursuant to such a notice.
3) Condemnation Award
Assign to City any award of damages in connection with any taking or condemnation , or for
injury to .the Project by reason of public use by any public body, including but not limited to
City, and such is hereby assigned and shall be paid to City as further security for all
obligations secured by this Agreement and Note. On receipt of any such proceeds, the
parties agree that the award shall be assigned to City to pay the outstanding balance of the
Loan, if any, with the .remainder of the award paid to the Association. ln addition, any award
of damages for private trespass or injury to the Project shall be used to restore or repair any
damage to the Project.
4) Assignment of Rents
As additional security, Association hereby gives to and confers on City the right, power, and
authority during the time the Loan is outstanding, to collect the rents, issues, and profits of
the Project, but reserves the right, prior to any uncured default by Association in payment of
any indebtedness secured by this Agreement or the Note, to collect and retain these rents,
issues, and profits as they become due and payable. On any such default, which is not
cured within the period of time set forth in Section 33 of this Agreement, City may assume
control over use of the Project and the right to rent, lease or otherwise use the Project for
any lawful purpose and to retain any rents, issues and profits therefrom to apply to amounts
due under this Agreement and the Note. City may also seek the appointment of a receiver
to operate. the Project and/or to collect the rents, issues, and profits of the Project for the
benefit of City. The exercise of these enforcement rights by City shall not cure or waive any
default or notice of default under this Agreement or invalidate any act done pursuant to such
a notice.
5) Maintain the BID's existence until the Loan is repaid
Maintain the BID's existence and take no action to dissolve the BID until such time as the
Loan has been repaid in full.
6) Maintain Six Month Operating Reserve Fund
Association shall maintain a minimum six month operating reserve fund in the BID starting
Fiscal Year 2017-2018 and until the loan is repaid in full to ensure that payments to the City
are made timely. Any reduction in funding below such operating reserve level without the
written consent of City shall constitute a default, if such default is not cured within the time
period set forth in Section 33 of this Agreement.
7) Assign Ownership of Project to City
Assign ownership of the entire Project to the City in writing if the entire balance of the Loan
is not paid by the Loan Termination Date, free of all liens, claims or other demands.
Provided, however, that such assignment shall be subject to the default notice and cure
provisions contained in Section 33 of this Agreement,
s. Use and Operation of the Site. It is specifically understood and acknowledged by the parties
that the Agreements made by Association with the City, including but not limited to the Business
Promotion Services Agreement, 1994 Cooperation Agreement, and the Readerboard Participation
Agreement as well as the ongoing operation of the Association member's auto dealerships within the BID,
were and are a materiai and substantial inducement to the City in agreeing to execute this Agreement. In
the absence of Association's representations and assurances, the City would not have entered into this
Agreement. Consequently, the Association's compliance with the foregoing agreements and the ongoing
operation of a minimum of four auto dealerships by the Association's members within the BID for the
entire term of this Agreement, is made an express material condition of this Agreement.
6. Compliance with Governmental Regulations/Prevailing Wages. The Association shall carry out
the Project in conformity with all applicable federal, state, and local laws. Association acknowledges that
it is aware of all applicable laws impacting the proposed Project, and will exercise diligence in its
compliance therewith. The Parties understand and agree that the Loan is intended only for and will not
be used for anything except the costs of the Project. Association understands that it may be required to
cause all of its contractors to pay prevailing wages in compliance with California Labor Code Section
1770, and comply with all regulations and statutory requirements pertaining thereto. Association further
acknowledges and agrees that City has not and is not making any representation, warranty, or guarantee
regarding the applicability of prevailing wage requirements, and Association agrees that it shall be
independently responsible for reviewing the applicable law ~nd regulations and complying therewith. In
addition to any other indemnifications set forth in this Agreement, Association shall indemnify, defend,
and hold the City and its respective officers, employees, and agents harmless from and against any
liability, loss, damage, cost or expenses (including reasonable attorneys' fees, expert witness fees, and
court costs) arising from Association's failure, or its contractor's or subcontractor's failure, to pay the
applicable prevailing wages in accordance with California law.
7. Payment of Assessment. The specific and the timely payment of the BID assessment by all of the
members of the Association and the City's receipt of the same is a material part of this Agreement, and a
condition precedent to City's obligations under this Agreement. Furthermore, this Agreement shall not
alter any provision of the West Covina Municipal Code or federal or state law, including the California
Revenue and Taxation Code or California Constitution pertaining to assessments or taxes, and all such
taxes and/or assessments shall be due and payable at all times in accordance with applicable law.
Nothing in this Agreement shall relieve the Association or its members of their obligation to file all returns
and other reports in a timely manner, and to remit the full amount of property taxes and assessments for
the BID assessment, property owned by the Association, and property located within the BID that is
owned by Association members, that are due and payable under state law or the West Covina Municipal
Code. The failure of the Association or its members to make all BID assessment or property tax payments
for property located within the BID, that are due and payable under state or local law, shall constitute a
1
I I
material breach of this Agreement, and shall, after the appropriate notice and cure periods, allow City to
immediately accelerate the entire remaining balance owed by Association on the promissory note and
take any and all steps legally available to it to recover the full amount due to City, with interest
Notwithstanding anything to the contrary contained herein, no breach shall be declared, until Association
has been given thirty (30) days' written notice of the breach, and has failed to cure the breach within that
period pursuant to the terms of Section 33 of this Agreement.
8. Association's Indemnity. The Association shall indemnify, defend, and hold harmless the City and
its officers, employees, agents, and representatives from and against (i) any action challenging the
validity of this Agreement; or (ii) any and all liability, loss, damage, costs, and expenses (including
reasonable attorney's fees and court costs) arising from or as a result of the death or injury of any person
or any accident, injury, loss, or damage whatsoever (whether or not covered by insurance) caused to any
person or to the property of any person which may arise directly or indirectly from the negotiation,
formation, execution, enforcement or termination of this Agreement; or (iii) which shall be caused by any
acts done or any errors or omissions of Association or any of its respective agents, servants, employees,
and contractors in performing its terms and obligations under this Agreement or otherwise related to the
Project.
Nothing in this section shall be construed to mean that the Association shall hold the City harmless or
defend it to the extent that such claims, costs or liability arise from, or alleged to have arisen from, the
sole negligence or willful misconduct of the City. The defense obligation provided for hereunder shall
apply without any advance· showing of negligence or wrongdoing by the Association, its employees,
and/or authorized subcontractors, but shall be required whenever any claim, action, complaint, or suit
asserts as its basis the negligence, errors, omissions or misconduct of the Association, its employees,
and/or authorized subcontractors, and/or whenever any claim, action, complaint or suit asserts liability
against the City, its elected officials, officers, agents or employees based upon the work performed by
the Association, its employees, and/or authorized subcontractors under this Agreement, whether or not
the Association, its employees, and/or authorized subcontractors are specifically named or otherwise
asserted to be liable. This provision shall supersede and replace all other indemnity provisions.
9. Insurance. Association shall, at all times during the Term of this Agreement and at Association's
sole cost and expense, obtain and keep in force:
a) Commercial general liability insurance, written on an occurrence basis, with coverage on a
form acceptable to both parties, in an amount not less than One Million Dollars/Two Million
Dollars ($1 ,000,000.00/$2,000,000) limit per occurrence/aggregate. ·Umbrella liability
insurance may be used to achieve the above minimum liability limits, provided that the policy
coverages are absolutely concurrent;
b) Property insurance covering all contents, trade fixtures, machinery, equipment, furniture and
furnishings constituting the Project and the real property to which it is affixed ("Association's
Property"), and all Alterations to the Project made by or on behalf of Association.
All insurance required under this Paragraph 9 and all renewals thereof shall be issued by financially
responsible and reputable insurance companies, qualified to do business in the State of California and
reasonably acceptable to City. Each policy shall have a deductible or deductibles, if any, which does
not exceed Ten Thousand Dollars ($10,000) per occurrence. Each policy shall expressly provide that
the policy shall not be canceled or altered without thirty (30) days' prior written notice to City and shall
remain in effect notwithstanding any such cancellation or alteration until such notice shall have been
given to City and such period of thirty (30) days shall have expired. All liability insurance under this
Paragraph 8 shall name City and any other parties designated by City as an additional insured, shall be
primary and noncontributing with any insurance which may be carried by City, shall afford coverage for
all claims based on any act, omission, event or condition that occurred or arose (or the onset of which
occurred or arose) during the policy period, and shall expressly provide that City, although named as an
insured, shall nevertheless be entitled to recover under the policy for any loss, injury or damage to City.
1
Upon the issuance thereof, Association shall deliver each such policy or a certified copy and a
certificate thereof to City for retention by City. If Association fails to insure or fails to furnish to City upon
notice to do so any such policy or certified copy and certificate thereof as required, City shall have the
right from time to time to effect such insurance for the benefit of Association or City or both of them and
all premiums paid by City shall be payable by Association on demand.
To the extent permitted by law and without affecting the coverage provided by insurance to be
maintained hereunder, (i) Association waives on behalf of all insurers under all policies of property,
liability and other insurance (excluding workers' compensation) now or hereafter carried by Association
insuring or covering the Project, or any portion thereof, or any operations thereof, all rights of
subrogation which any insurer might otherwise, if at all, have to any claims of Association against City ..
Association shall, prior to or immediately after the date of this Agreement, procure from each of the
insurers under all such insurance, a waiver of all rights of subrogation which the insurer might otherwise,
if at all, have to any claims of the insured against the City as required by this Paragraph 9. In the event
Association is unable to obtain such a waiver, it shall immediately notify the City of this inability. In the
absence of such notification, Association shall be deemed to have obtained such waiver of subrogation.
10. Taxes and Assessments. At all times, the Association and its members shall pay, prior to
delinquency, all ad valorem real estate taxes and assessments on the properties within the BID owned
and possessed by the Association members, and other taxes and assessments applicable to the BID,
subject to the Association's right to contest in good faith any such taxes. The Association shall remove or
have removed any levy or attachment made on the site of the Project or any real property upon which
the Project is located accruing after the Effective Date of this Agreement.
11. Relationship Between the City and the Association. It is hereby acknowledged that the
relationship between the City and the Association is not that of a partnership or a joint venture, and that
the City and the Association shall not be deemed or construed for any purpose to be the agent of the
other.
12. City Approvals and Actions. Any and all modifications or amendments to this Agreement shall
be in writing , and shall require the approval of both the West Covina City Council and Association.
13. Assignment. It is recognized by the Parties hereto that a substantial inducement to the City for
entering into this Agreement was, and is, the professional reputation and the competence of the
Association and of the Association members. This Agreement is personal to Association and shall not be
assigned by it without the express written approval of the City, which consent may be given or withheld in
the City's sole discretion.
14. Successors and Assigns. All of the covenants, terms, and conditions of this Agreement
shall be binding upon the Association and its permitted successors, assigns, and operator(s).
15. Compliance with Laws, Rules, and Regulations. Association warrants that it shall perform the
services required by this Agreement in compliance with all applicable Federal and California
employment laws including, but not limited to, those laws related to minimum hours and wages;
occupational health and safety; fair employment and employment practices; workers' compensation
insurance and safety in employment; and all other Federal, State and local laws and ordinances
applicable to the Project or otherwise required under this Agreement. Association shall indemnify and
hold harmless City from and against all claims, demands, payments, suits, actions, proceedings, and
judgments of every nature and description including attorneys' fees and costs, presented, brought, or
recovered against City for, or on account of any liability under any of the above-mentioned laws, which
may be incurred by reason of Association's performance under this Agreement.
I
16. Acknowledgement of Existing Conditions. Association affirms that it has fully investigated the
site of the Project, and is proceeding with the Project with a full understanding and acceptance of the
existing conditions on the property and surrounding uses.
17. Exhibits Incorporated. All exhibits referred to in this Agreement, and attached to it, are hereby
incorporated herein by this reference. In the event there is a conflict between any of the terms or
conditions in this Agreement and the terms or conditions in one of the exhibits to this Agreement, the
terms and conditions in this Agreement shall govern and control.
18. Integration and Agreement. This Agreement represents the entire understanding of the City and
the Association as to those matters contained herein. No prior oral or written understanding shall be of
any force or effect with respect to those matters contained herein. This Agreement may not be modified
or altered except upon the approval of the West Covina City Council, which shall be memorialized by an
amendment in writing and signed by both Parties. Nothing herein is intended to affect the Agreement for
Business Promotion Services between the Association and the City, as extended and assigned, and the
City shall retain all rights to use 10 percent of the signage time as provided in Exhibit A of the extended
Agreement for Business Promotion Services entered into on October 5, 1993. Nor does this Agreement
affect any other written agreement between the Association and the City which remains in effect as of
the date of this Agreement.
19. Jurisdiction. This Agreement shall be administered and interpreted under the laws of the State of
California. Jurisdiction of litigation arising from this Agreement shall be in the State of California, in the
County of Los Angeles, or in the appropriate federal court with jurisdiction over the matter.
20. Severablllty. If any part of this Agreement is found to be in conflict with applicable laws, such part
shall be inoperative, null, and void insofar as it is in conflict with said laws, but the remainder of the
Agreement shall continue to be in full force and effect.
21. Notices. Any notices required by this Agreement shall be deemed received on (a) the day of delivery
if delivered by hand or overnight courier service during Associations' and City's regular business hours or
by facsimile before or during Association's regular business hours, provided that in the case of facsimile
delivery, a copy of the notice is also sent to the recipient by overnight courier or certified mail, as provided
herein, on the same day as the facsimile transmission; or (b) on the third business day following deposit
in the United States mail, certified, return receipt requested, postage prepaid, to the addresses heretofore
set forth in the Agreement, or to such other addresses as the parties may, from time to time, designate in
writing pursuant to the provisions of this Section.
a. City:
b. Association:
Chris Freeland
City Manager
City of West Covina
1444 West Garvey Avenue South
West Covina, California 91790
President/ Roger Penske
West Covina Auto Plaza Association, Inc.
c/o Community & Economic Development
1444 West Garvey Avenue South
West Covina, CA 91790
President
1
West Covina Auto Plaza Association, Inc.
Confirm Address Annually
c. The execution of any such notices by the City Manager of the City shall be effective as to the
Association as if it were by resolution or order of the City Council, and the Association shall not
question the authority of the City Manager to execute any such notice.
d. All such notices shall either be delivered personally to the other Party's designee named above,
or shall be deposited in the United States Mail, properly addressed as aforesaid, postage fully
prepaid, and shall be effective the day following such deposit in the mail.
22. Headings. The section headings appearing herein shall not be deemed to govern, limit, modify or
in any manner affect the scope, meaning or intent of the provision of this Agreement.
23. Attorney's Fees. In case suit shall be brought to interpret or to enforce this Agreement, or
because of the breach of any other covenant or provision herein contained, the prevailing party in such
action shall be entitled to recover its reasonable attorneys' fees in addition to such costs as may be
allowed by the court. City's attorney fees, if awarded, shall be calculated at the market rate.
24. Rights and Obligations Under Agreement. By entering into this Agreement, the Parties do not
intend to create any obligations express or implied other than those set out herein; further, this
Agreement shall not create any rights in any party not a signatory hereto.
25. Further Acts. Each of the Parties agree to take whatever further action, including the execution of
other and further documents, as may be required to effectuate the intent of the Parties and to carry out
the terms of this Agreement.
26. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute a single agreement.
27. Legal Representation. Each Party affirms that it has been represented by legal counsel of its own
choosing regarding the preparation and the negotiation of this Agreement and the matters and claims
set forth herein, and that each of them has read this Agreement and is fully aware of its contents and its
legal effect. Neither Party is relying on any statement of the other party outside the terms set forth in this
Agreement as an inducement to enter into this Agreement.
28. Joint Representation. The language and all parts of this Agreement shall in all cases be
construed as a whole, according to its fair meaning, and not strictly for or against any party. No
presumptions or rules of interpretation based upon the identity of the party preparing or drafting the
Agreement, or any part hereof, shall be applicable or invoked.
29. Warranty of Authority. Each party represents and warrants that it has the right, power, and
authority to enter into this Agreement. Each party further represents and warrants that it has given any
and all notices, and obtained any and all consents, powers, and authorities, necessary to permit it, and
the persons entering into this Agreement, to enter into this Agreement.
30. Non-discrimination. In performing this Agreement, Association shall not engage in, nor permit its
agents to engage in, discrimination in employment of persons because of their race, religion, color,
national origin, ancestry, age, physical handicap, medical condition, marital status, pregnancy, sexual
gender or sexual orientation, except as permitted pursuant to Section 12940 of the California
1
Government Code. Violation of this provision may result in the imposition of penalties referred to in
California Labor Code, Section 1735. Association will take affirmative action to ensure that
subcontractors and applicants are employed, and that employees are treated during employment,
without regard to race, color, creed, religion, sex, marital status, pregnancy, national origin, ancestry,
age, physical or mental handicap, sexual gender or sexual orientation, or medical condition.
31 . Non-Waiver of Terms, Rights and Remedies. Waiver by either party of any one or more of the
conditions of performance under this Agreement shall not be a waiver of any other condition of
performance under this Agreement. In no event shall the making by City of any payment to Association
constitute or be construed as a waiver by City of any breach of covenant, or any default which may then
exist on the part of Association, and the making of any such payment by City shall in no way impair or
prejudice any right or remedy available to City with regard to such breach or default.
32. Cumulative Powers and Remedies. The powers and remedies conferred in this Agreement to City
are concurrent and cumulative to all other rights and remedies provided in this Agreement or given by
law. Upon the occurrence of a default, these powers and remedies may be exercised singly,
successively, or together, and as often as deemed necessary.
33. Default. Failure to comply with any material term of this Agreement shall be grounds for declaration
of a breach. No breach shall be declared under this Agreement or the Note, until the breaching party
has first been given thirty (30) days' written notice of the breach, and has failed to cure, or if the breach
cannot be cured within thirty (30) days, so long as the defaulting party commences to cure such default
within ten (10) days of service of such notice and diligently prosecutes the cure to completion within a
reasonable period of time. If a breach is not cured or cure has not been commenced within the period
set forth in this Section 33, in addition to any other remedy available to the non-breaching party in this
Agreement or under law, the non-breaching party may terminate this Agreement.
IN WITNESS WHEREOF, the Parties have made and executed this Agreement on the date first written
above.
Dated : ------
Dated:------
APPROVED AS TO FORM:
Kimberly Hall Barlow, City Attorney
CITY OF WEST COVINA
Chris Freeland, City Manager
1
ATTEST:
Dated: -------
City Clerk
Dated: ______ _ WEST COVINA AUTO PLAZA ASSOCIATION, INC.
~x~
By: --d---==-......... ------
Loan Amortization Schedule
Enter values
Loan amount s 532,582.00
Annual interest rate 2.00 %
~ ---Loan period in years 10
Number of payments per year 2
Start date of loan 07/01/2016
Optional extra payments $ -~ -
Lender name:
Pmt. I Payment Date I Beginning Balance I Scheduled I Extra Payment I Total Payment I No. Payment -----01/01/2017 5 532,5.'l:WO 5 29,51:1.:20 s $ 29,513.20
2 07/01/2017 s 508,'.144.o2 s 29,513.20 s $ 29,511.20
1 01/01/2018 s -!83,%5.17 $ 29,513.20 s $ 29,511.20
-! 07 /0l/'.!018 s 459,'.?91.82 s 29,5D.20 s s 29,511.20
5 01/01/2019 s -B-!,'.171.5-l s 29,513.20 ... s 29,511.20
6 07/01/2019 $ 4(l9,202.(l6 s 29,511.20 s s 29,511.20
7 01/01/2020 s 18.\780.88 s 29,51'.l.2() s s 29,511.20
8 07/01/2020 s 358, 105.-14 s 29,513.20 s s 29,5U.20
9 01/01/2021 s "H2,17D-l s 29,51.,.20 s s 29,51 t20
10 07/01/2021 s '.105,981.88 s 29,513.20 5 $ 29,511.20
II 01/01/2022 s 279,528.50 s 29,513.20 ', s 29,511.20
12 07/01/2022 s 252,810.58 s 29,5D.20 s 5 29,SU.20
13 01/01/202.1 s 225,825.-19 s 29,513.20 s s 29,513.20
1-1 07/01/202.1 s 198,570.55 $ 29,51:\.20 c; s 29,511.20
15 01/01/2024 s 171,0-11.05 s 29,SB.20 5 s 29,5B.20
lh 07 /Ol /202-l s 1-13,2-10.28 s 29,51'.'>.20 s s 24,51'.l.20
17 01/01/2025 s 115,159.49 s 29,513.20 s s 29,511.20
18 07/01/2025 s 86,747.88 $ 29,51.1.20 !:, s 29,513.20
19 01/Cll /2020 s 58, 152.b<, $ 29,513.20 s $ 29,513.20
20 07/01/2020 5 24,220.91./ s 29,51J.20 s 5 29,220.99
Principal
s 2-1,187.'.18 s
s 2-1,-129.25 s
s 2-t,071.55 s
s 2-!,920.28 s
s 25,169.-18 s
s 25,Hl.18 $
s 25,b75.'.19 s
s 25,9)2.14 s
s 26,191.-17 $
s 2o,-t5'.l.38 $
c:, 20,717.91 s
5 26,485.09 ':,
s 27,25-1.9-1 5
$ 27,527.-19 $
s 27,802.77 $
s 28,080.80 s
s 28,101.60 s
s 28,6-15.22 s
s 28,911.67 s
s 28,928.78 ::,
Scheduled payment
umber of payments Scheduledn
Actual n
T
umber of payments
otal early payments
Total interest
Interest Ending Balance
5,125.82 5 508,'W-l.62
5,081.95 5 481,%5.17
-l,819.b5 $ 459,291.82
-!,592.92 s -!'>-l,171.5-1
-!,'.l.fl.72 s -!09,202.()6
-!,(192.02 5 '.18'.1,780.88
1,817.81 5 158,105.-14
3,581.()5 s '.132,17D-I
'.1,321.71 $ 305,981.88
1,059.82 s 279,528.50
2,795.28 s 252,810.58
2,528.11 s 223,825.-19
2,258.25 5 198,570.55
1,985.71 s 171,(J-l1.05
1,710.41 5 1-l'.1,2-10.28
1,412.-10 s 115, 159.-19
1,151.59 s 86,797.88
867.9~ $ 58,152.06
58 l.5~ s 29,220.99
292.21 s
Loan summary
$ 29,513.20
20
20
$ -
$ 57,681.98
Cumulative Interest
s 5,125.82
s I0,-1(19.77
s 15,2-19.-12
s 19,8-12 .. 1-!
s 2-l,18o.05
s 28,278.07
s ,2, 115.88 s .15,6%.9-1
s '.19,018.67
s -12,078.-19 s 1-1,873.77
s .. 47,-lOl .88
$ .l<J,060.1-1
s 51,o-15.8-1
$ 51,356.27
s 5-1,788.67
s 55,9-10.27
s 56,808.25
s 57,189.77
s 57,681.98
CITY LOAN PROMISSORY NOTE
$532,582.00 West Covina, California
June 22, 2016
FOR VALUE RECEIVED, WEST COVINA AUTO PLAZA ASSOCIATION, INC. a California non-profit
Corporation ("Association"), promises to pay to the CITY OF WEST COVINA, a California municipal
corporation (the "City") at the City's office at 1444 West Garvey Avenue South, West Covina, California
91790, or such other place as the City may designate in writing, the principal sum of $532,582.00, (the
"Note Amount").
1. Agreement. This Promissory Note (the "Note") is given in accordance with that certain LED Sign
Replacement Loan Agreement executed by the City and the Association, dated as of March 1, 2016 (the
"Agreement''). The rights and obligations of the Association and the City under this Note shall be
governed by the Agreement and by the additional terms set forth in this Note dated June 22 , 2016.
2. Interest. The Note Amount shall start to accrue interest at the rate of 2% simple interest per
annum following the City's disbursement to Association of the Note Amount until the entire Note Amount
is repaid in full. In the event Association fails to pay any assessment or property tax payment in a timely
manner, or otherwise commits a default of the Agreement or this Note. which is not cured within the
required thirty (30) day cure period, Association understands and agrees that the City retains the right to
and may, in the City's sole discretion, accelerate the full Note amount, as authorized in the terms of the
Note.
3. Repayment of Note Amount. The Association agrees to make payments, with interest, in equal
bi-annual payments over a ten (10) year period ("Association Paymenr).
The first Association Payment shall be delivered by the Association to City on December 31 , 2016. The
next Association Payment shall be paid six months later on or before June 30, and such payments shall
continue each December 31 and June 30 thereafter until the Note Amount has been repaid in full. Any
remaining portion of the Note Amount shall be due and payable in its entirety on July 1, 2026.
Notwithstanding the foregoing, the full Note Amount may be accelerated as set forth herein.
The total amount of the principal, interest and any other amounts owing under this Note shall become
immediately due and payable, upon written notice to Association, at the option of the holder of this note,
upon the earlier to occur of the following:
a. In the event of a default by the Association in the performance of any of the terms of the
Agreement or this Note, which default has not been cured within the period of time set forth in
those documents;
b. If the Association defaults on the payment of principal, interest, or any other sum required under
this note when due, which default has not been cured within the period of time set forth in the
Agreement;
c. In the event Association or any of'its members fail to make any assessment or property tax
payment pursuant to the requirements of state or local law, in accordance with Section 7 of the
~~m~ ..
d. In the event the Association fails to make payments required by any encumbrance on the
property on which the Project Site is located or to perform any obligation under such
encumbrance or otherwise allow any such encumbrance to be in default beyond any cure period
provided by the agreements relating to such encumbrance.
e. In case of anticipation of bankruptcy, insolvency or financial difficulties:
1. Association or any guarantor of Association's obligations hereunder shall generally not pay its
debts as they become due or shall admit in writing its inability to pay its debts, or shall make a
general assignment for the benefits of creditor;
2. A case is commenced by or against Association under Chapter 7, 11 or 13 of the Bankruptcy
Code, Title 11 of the United States Code as now in force or hereafter amended and if so
commenced against Association, the same is not dismissed within sixty (60) days.
3. The appointment of a trustee or receiver to take possession of substantially all of Association's
assets, where such seizure is not discharged within thirty (30) days; or
4. Association's convening of a meeting of its creditors or any class thereof for the purpose of
effecting a moratorium upon or composition of its debts.
Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them
due subsequently. Notwithstanding the foregoing, Association may pay the City the balance of the Note
Amount, or any portion thereof, at any time prior to the Loan Termination Date without incurring any
prepayment penalties.
4. Security. This Note is secured by additional covenants set forth in the Agreement.
5. Waivers
a. No extension of time for payment of this Note made by agreement by the City with any person
now or hereafter liable for the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of Association under this Note, either in whole or in part.
b. The obligations of Association under this Note shall be absolute and Association waives any and
all rights to offset, deduct or withhold any payments or charges due under this Note for any
reasons whatsoever.
6. Attorneys' Fees and Costs. Association agrees that if any amounts due under this Note are not
paid when due, and remain unpaid beyond any applicable cure period, to pay in addition, all costs and
expenses of collection and reasonable attorneys' fees paid or incurred in connection with the collection or
enforcement of this Note, whether or not suit is filed.
7. Acceleration. The Agreement provides for acceleration of the payments due under this Note in
the event of default under the Agreement or this Note, which default has not been cured within the period
of time set forth in the Agreement.
8. Amendments and Modifications. This Note may not be changed orally, but only by an
amendment in writing signed by Association and by the City.
9. City May Assign. City may, at its option, assign its right to receive payment under this Note
without necessity of obtaining the consent of the Association.
10. Association Assignment Prohibited. In no event shall Association assign or transfer any
portion of this Note without the prior express written consent of the City, which consent may be given or
withheld in the City's sole discretion.
11. Terms. Any terms not separately defined herein shall have the same meanings as set forth in
the Agreement.
Dated: ·<'b-/.3-/7 WEST COVINA AUTO PLAZA ASSOCIATION, INC.
< 1C~---By:
A notary public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of
that document.
California Notary Acknowledgment
State of California
County of Los Angeles
Notary Public, personally appeared
[date], before me, °boNNA :f · W~, NcW:7~U..l , a
l&o66fL ~ ~~ 'Jl. , who
proved to me on the basis of satisfactory evidence to be the persol'Jks} whose name'8fjs/~subscribed to
the within instrument and acknowledged to me that he/~hpy-executed the same in his/pet/.tReir authorized
capacity~ and that by his/l}e1'7fb.etf signature~on the instrument the person(~ or the entity on behalf of
which the person(.sfacted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand and official seal.
Signatur~~
[Notary Seal]
25
AGENDA
ITEMNO. 5
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: August 2, 2017
TO: Mayor and City Council
FROM: Chris Freeland
City Manager
SUBJECT: FISCAL YEAR 2016-17 BUDGET AMENDMENT
llliCOMMENDATlON:
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. 2017-78-A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF WEST COVINA, CALIFORNIA, ADOPTING A
BUDGET AMENDMENT FOR THE FISCAL YEAR COMMENCING
JULY 1, 2016, AND ENDING JUNE 30, 2017 (Jones & Mayer)
DISCUSSION:
City Staff is requesting that the City Council appropriate General Fund expenditures in the total
cumulative amount of $80,000 to the following accounts: Acct# 110.11.1140.6 178; Acct#
110.11.1140.611 1; and Acct # 110.11.1140.6 113 for legal costs for Jones & Mayer. Jones &
Mayer serve as the City Attorney for the City of West Covina. The City pays a monthly retainer
of $13,125. Any changes above the retainer are charged to the City Attorney's budget in the City
Manager's Office.
During the course of the year, the City of West Covina has experienced a significant increase in
legal costs associated with various litigations, including: MS4 Permit; Bob's Towing; Fair Labor
Standards Act cases; Chronic Revolution; WC Homes; Di stricting; and several labor matters. The
following appropriation will provide the necessary funding to pay any remaining expenditures for
Fiscal Year 16-17.
Fiscal Year 20 16-17 Budget Amendment
Page 2 of2 -August 2, 2017
FISCAL IMPACT:
The proposed budget amendment will increase the expenditure budget and decrease fund balance
in the General Fund by $80,000.
Prepared by:
~j!at~ ht
Financial Consultant
ATTACHMENT:
AttachmentNo. 1 -Resolution No. 20 17-78
Attachment No. 1
RESOLUTION NO. 2017-78
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
WEST COVINA, CALIFORNIA, ADOPTING A BUDGET
AMENDMENT FOR THE FISCAL YEAR COMMENCING
JULY 1, 2016, AND ENDING JUNE 30, 2017 (Jones & Mayer)
WHEREAS, the City Manager, on or about June 21,2016, submitted to the City Council
a proposed budget for the appropriation and expenditure of funds for the City for West Covina for
Fiscal Year 2016-17; and
WHEREAS, following duly given notice and prior to budget adoption, the City Council
held a public meeting on June 21, 2016 and July 5, 2016, receiving, considering and evaluating all
comments, and adopted a budget for the fiscal year commencing July 1, 2016 and ending
June 30, 2017; and
WHEREAS, amendments must periodically be made to the budget to conform to changed
circumstances following adoption of the budget.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA,
CALIFORNIA DOES RESOLVE AS FOLLOWS:
SECTION 1. Budget Adjustment No. 177 is hereby approved as reflected on Exhibit No.
1, attached hereto.
SECTION 2. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 2nd day of August, 201 7.
APPROVED AS TO FORM
Kimberly Hall Barlow
City Attorney
Corey Warshaw
Mayor
ATTEST
Nickolas S. Lewis
City Clerk
I, HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council
of the City of West Covina, California, at a regular meeting thereof on the 15th day of August,
2017, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
Nickolas S. Lewis
City Clerk
Date:
Requested by:
Dept/Div:
EXPENDITURES
Account Number
110.11.1140.6178
110.11.1140.6111
110.11.1140.6113
REVENUES
Account Number
CITY OF WEST COVINA
BUDGET AMENDMENT
6/30/2017
Chris Freeland
City Manager
Dept/ Account Description
City Attorney Retainer
Legal Services
Litigation
Account Description
REASON/JUSTIFICATION (Please be specific)
Exhibit No. 1
BA # 177
Posted By:
Date Posted:
Fiscal Year: 2016-17 Amount:~~~8~0~07007.~0~0---------------
Description: Legal Services
Proposed
Current Budget Amendment Amended Budget
157,500.00 530.00 158,030.00
200 000.00 76,970.00 276 970.00
100 000.00 2 500.00 102 500.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Proposed
Current Budget Amendment Amended Budget
-
-
-
-
-
To appropriate an additional $80,000 in expenditures for final cumulative invoices for fiscal year 16/17 in legal
costs.
APPROVALS
City Council Approval Date (if required, attach minutes):
Dept Head Approval :
Finance Director:
Funds Available?
City Manager:
(if over $100,000)
see attached
o Yes oNo
see attached
__ ____::8::t../.=2L.:/2::.:0::...:1::..:.7 ___ o Approval Not Required
Date: -------------
Date: ____________ _
Date: ___________ _
o A roved o Denied
DATE: August 2, 2017
AGENDA
ITEMNO. 6
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
TO:
FROM:
Mayor and City Council
Chris Freeland
City Manager
SUBJECT: ATHENS SERVICES ROLLING CONTRACT TERM PROVISION
RECOMMENDATION:
It is recommended that the City Council discuss if it desires to exercise a notice of intent to
terminate the Athens Services 25-year rolling contract (evergreen) provision.
BACKGROUND:
Athens Services and the City of West Covina have sustained a business relationship through an
exclusive franchise agreement for municipal waste collection since 1992.
In May 1999, the City of West Covina entered into an "Amended and Restated Agreement" that
superseded the original 1992 agreement with Athens Services. This agreement initiated the
collection of all municipal waste by Athens to be processed at its Materials Recovery Facility
(MRF). From 1999 to 2008, the City of West Covina approved Amendments No. I -No. 8, which
included extensions of the term of the agreement, rate increases, and termination requirements.
In 2012, the City Council approved the 9th Amendment to the Agreement, which provided an
extension of the term of the agreement with Athens Services from a 12-year rolling contract term
to a 25-year rolling contract tenn. In exchange for the new 25-year rolling contract term, the City
of West Covina received a one-time $2 million payment and an annual $100,000 contribution for
the City's 4th of July Celebration, Summer Concert Series, and the West Covina Police
Department's SWAT Team. The Agreement stated that the $100,000 contribution would be
discontinued if the City of West Covina ever tenninated the 25-year rolling contract term
provision.
Athens Services Rolling Contract Term Provision
Page 2 of 3 -August 2, 2017
DISCUSSION:
At the November 1, 2016, City Council Meeting, Council approved the 1ou1 Amendment and
Settlement Agreement with Athens Services. As part of this Amendment and Settlement
Agreement, Athens Services increased the annual contribution to the City of West Covina from
$100,000 to $300,000 and removed the specific designations regarding the use of the funds. The
10th Amendment restated that if the City of West Covina ever terminated the 25-year rolling
contract tenn provision, the $300,000 annual contribution would also be terminated.
The Agreement requires that if the City desires to end the rolling contract provision, Athens
Services must be provided a notice of intent to terminate the automatic renewal provision by no
later than 90 days prior to November 1st of any calendar year.
Section 3.1 of Amendment No. 9 to the Athens Agreement reads as follows:
"Notwithstanding the foregoing, should either party desire that said one-year renewal and
extension provision be tenninated, such party may give the other written notice of intent
to terminate at least ninety (90) days prior to any anniversary date of any year during
which this Agreement is in full force and effect and written notice of termination at least
sixty ( 60) days prior to any such anniversary date.
During the thirty (30) day period following notice of intent to terminate, the parties shall
meet and confer at the request of either party. If the notice of termination is given, the
one-year renewal and extension provision shall be terminated on the applicable
anniversary date. Once the one-year renewal and extension provision is tenninated, the
remaining term of this Agreement shall be twenty-five (25) years from the date of
termination, and the tenn of this Agreement shall accordingly wind down from this date.
All other aspects of this Agreement shall remain in full force and effect during the wind
down period."
In addition to the elimination of the $300,000 annual contribution, Athens has indicated that other
non-contractual benefits that the City has received in the past may be discontinued should the
rolling contract term provision be terminated (i.e. roll-off bins for special events, free advertising
of the Shop Local After School Program, free compost, etc.).
Furthermore, exercising a notice of intent to terminate at this time may also result in an effort to
trigger the existing recapture provision in the current Athens Agreement. The recapture provision
allows Athens to recapture revenue on rates charged to multi-family customers going back to 2003
should the automatic one-year renewal term of the agreement be terminated by the City.
Section 8.1.1 of Amendment No. 4 to the Athens Agreement reads as follows:
"Notwithstanding anything in this Agreement to the contrary, the previously collected
Multi-family Residential rate stmcture is hereby eliminated. All Multi-family residential
users will be charged the current (November 1, 2003) Commercial rate stmcture (as set
forth I Exhibit E to the Agreement).
Athens Services Rolling Contract Tenn Provision
Page 3 of 3 -August 2, 2017
In the event the City invokes its right to terminate the automatic one-year renewal and
extension provision set forth in Article 3 .1 (B) ("Rolling Tenn") of the Agreement,
Athens shall then be entitled to adjust the Commercial rate structure for Multi-family
residential users only in order to generate for Athens revenues lost as a result of the
merging of the Multi-family residential user rate into the Commercial rate in the amount
of $6,011.75 per month ("Recaptured Revenue Ammmt"). The Recaptured Revenue
Amount shall be adjusted by a cumulative CPI (as defined in paragraph A.4. set forth in
"Exhibit F -Rate Increase Formula" to the Agreement) calculation from April, 2003 to
the date the Rolling Term is eliminated to establish the new Commercial rate for Multi-
family residential users effective at the time the Rolling Term is terminated."
Should the City Council desire to exercise a notice of intent to terminate the Athens Services 25-
year rolling contract ( evergreen) provision, a notice of intent must be provided to Athens by no
later than August 3, 2017 (90 days prior to November I, 2017).
FISCAL IMPACT:
Should the City Council desire to terminate the rolling contract term provision, the annual
contribution by Athens Services of $300,000 each year to the City of West Covina would be
terminated effective November 1, 2017. The $300,000 annual contribution was included and used
to close the Budget Gap in the adopted Fiscal Year 2017-18 budget.
Prepared by:
~ -~·, l./~ ~---
,/ Laura Minnich
Deputy City Manager